(Chapter 13)U.S. concerns, the European Union and the International Monetary Fund rescue package, but the money thrown into the sea? (2)



If someone told you: investment to buy stocks in 2012, this will be your life, the only time you can buy the cheapest stocks that you believe that?
The fact is: Regardless of whether you believe, anyway, I believe.


I can tell you that next year the worst economic situation, is there some European countries, the actual debt default, and trigger the disintegration of the euro, such a situation will definitely arise, and the consequences will be disastrous, when the situation when on earth, every person in this world which he, the opportunity to buy the cheapest stock, will appear.

當股票的市盈率,下跌至 5至 6倍時,便是進入市場的最佳時機,比較2008更便宜,因為2008年,那時的市盈率,都是 7至 8倍。筆者的第一桶金便是由這一次難得的機會,賺回來的。

When the stock price-earnings ratio, down to 5 to 6 times, is the best time to enter the market, relatively cheaper 2008 because in 2008, when the price-earnings ratio, are 7 to 8 times. My pot of gold is a rare opportunity from this, a bonus.


To make readers easy to understand my philosophy, I would like to my readers to explain the meaning of quantitative easing:


Quantitative easing is a monetary policy by the central bank through open market operations to increase the money supply, can be considered to create a specified amount of money, has also been described as a simplified manner, thereby increasing the money supply, large print money.

The actual operation is determined by the central bank through open market operations, the purchase of shares on the financial markets or other assets, the bank opened in the central bank clearing accounts, increase funding for the banking system into the new capital liquidity.

“Quantitative easing" in the “quantitative", meaning that will be created, the amount of money, and “loose" means to reduce the bank’s financial pressures.

Central bank to use money created out of thin air, in the open market purchase of government bonds; or lend to, deposit-taking institutions, from banks to buy assets.

These measures will lead to a decline in government bond yields; overnight interbank interest rate reduction, which sits on a large number of banks, only a very low interest earning assets.
Expect the central bank, the bank will, therefore, more willing to provide loans to industrial or commercial establishment, in order to earn a return, the financial markets to ease the financial pressure.
When the bank funds, have been loose, or purchase of assets, depreciation will be followed by inflation (such as Treasury bonds), the quantitative easing, will tend to depreciate the currency.
Because quantitative easing is likely to increase the risk of currency devaluation, the government usually facing deflation, the introduction of quantitative easing measures. The continuous quantitative easing measures will increase the risk of inflation.


Introduction of quantitative easing measures on the real economy, not much help, but, on the investment market will or the atmosphere, there will be a major stimulus.


More importantly, when U.S. investment bank is encountered, the occurrence of liquidity crisis, but European sovereign debt crisis, but it contains a real risk of debt default.


U.S. economic recovery is continuing the process, the worst of the economic data has been passed, and this is the best news in 2012. However the U.S. debt, just like snowball, swelling down.


U.S. election year, Democrats and Republicans, in the debt ceiling issues, the debate continued, may still affect investor sentiment. In addition, the global leader in the election cycle, international trade friction, is escalating, almost inevitable.


BRIC (Brazil, Russia, India, and China) in 2011 faced the obstacles encountered in the development of the stock market performance, far from ideal. 6-7 consecutive years because of rapid growth, their economies have suffered a variety of economic imbalances.

Exchange rate fluctuations, the full flow of hot money, the economy, and financial development will be subject to distortions, I believe that the BRIC countries, in 2012, China’s troubled opportunities were not small.

雖然歐盟及國際貨幣基金組織成員國,已經達成共識,將合共提供 2000億歐元,協助金融市埸,穩定市場的情況。

Although the European Union and the International Monetary Fund member countries, a consensus has been reached, will provide a total of 200 billion euros to help the financial market, stable market.

但是,佔有 IMF最大份額的美國,及其他有意注資的新興國家,已經開始擔心,國際貨幣基金組織,向財政陷入困難的國家,提供的所有金錢支援,差不多是把金錢掉落大海,結果只有失去,不會返回來。

However, the IMF holds the largest share of the United States, and other potential funding of emerging countries, have begun to worry about, the International Monetary Fund, to finance a difficult country to provide support for all the money, money falling almost to the sea, only to lose the results of will not return to.


However, the former International Monetary Fund (IMF) executive director Domenica Lombardi has pointed out, even if the U.S. opposed, they cannot prevent the International Monetary Fund to provide financial support to Europe, because, the International Monetary Fund, have the responsibility to stop the debt crisis in Europe, spread to all countries.

目前,歐洲債務危機,仍然沒辦法解決。根據銀行分析員估計,匈牙利可能需要向歐洲聯盟及 IMF尋求多達150億歐元,緊急貸款,用以償還,2013年,總值 47億歐元的負債。IMF當局,即將派遣專家訪問團,前往布達佩斯,審視匈牙利的狀況。

So far, the debt crisis in Europe, still, there is no proper solution. According to bank analyst’s estimate, Hungary and the European Union may need to seek up to € 15 billion IMF emergency loans to repay, in 2013, worth 4.7 billion euros of debt. IMF authorities will dispatch experts to missions, to Budapest, Hungary to examine the situation.

為了使讀者更加了解隨後我的論述,下期我會首先向讀者解釋兩個基本的概念:1「信用違約掉期」是甚麼概念(CDS)? 2 「套息交易」或稱「信用違約互換交易」是甚麼概念?

To make my readers better understand the subsequent discussion, the next issue I will first explain to the reader of two basic concepts: 1 what is the meaning of(CDS) credit default swap concept?
2 what is the concept of carry trade?



The next issue published:

(Chapter 14)U.S. concerns, the European Union and the International Monetary Fund rescue package, but the money thrown into the sea? (3)




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